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Exhibit 10.4
EXCHANGE TRUST AGREEMENT
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions................................................................................2
Section 1.2 Interpretation Not Affected by Headings, Etc...............................................4
Section 1.3 Number, Gender, Etc........................................................................4
Section 1.4 Date for Any Action........................................................................4
ARTICLE 2
PURPOSE OF AGREEMENT
Section 2.1 Purpose....................................................................................4
ARTICLE 3
PROVISION OF INFORMATION
Section 3.1 Copies of Shareholder Information..........................................................5
Section 3.2 Other Materials............................................................................5
Section 3.3 Distribution of Written Materials..........................................................5
ARTICLE 4
INSOLVENCY EXCHANGE RIGHT AND AUTOMATIC EXCHANGE RIGHTS
Section 4.1 Grant and Ownership of the Insolvency Exchange Right.......................................6
Section 4.2 Legended Share Certificates................................................................7
Section 4.3 General Exercise of the Insolvency Exchange Right..........................................7
Section 4.4 Purchase Price.............................................................................7
Section 4.5 Exercise Instructions......................................................................7
Section 4.6 Delivery of Exchangeable Share Consideration; Effect of Exercise...........................9
Section 4.7 Exercise of the Insolvency Exchange Right In Other Circumstances..........................10
Section 4.8 Stamp or Other Transfer Taxes.............................................................11
Section 4.9 Notice of Insolvency Event................................................................11
Section 4.10 Qualification of ParentCo Common Stock..................................................12
Section 4.11 Reservation of ParentCo Common Stock....................................................12
Section 4.12 Automatic Exchange on Liquidation of ParentCo...........................................13
Section 4.13 Withholding Rights......................................................................15
ARTICLE 5
CONCERNING THE TRUSTEE
Section 5.1 Powers and Duties of the Trustee..........................................................15
Section 5.2 No Conflict of Interest...................................................................16
(i)
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Section 5.3 Dealings with Transfer Agents, Registrars, Etc............................................17
Section 5.4 Books and Records.........................................................................17
Section 5.5 Income Tax Returns and Reports............................................................18
Section 5.6 Indemnification Prior to Certain Actions by Trustee.......................................18
Section 5.7 Actions by Holders........................................................................18
Section 5.8 Reliance Upon Declarations................................................................19
Section 5.9 Evidence and Authority to Trustee.........................................................19
Section 5.10 Experts, Advisers and Agents............................................................20
Section 5.11 Investment of Moneys Held by Trustee....................................................21
Section 5.12 Trustee Not Required to Give Security...................................................21
Section 5.13 Trustee Not Bound to Act on Request.....................................................21
Section 5.14 Authority to Carry on Business..........................................................21
Section 5.15 Conflicting Claims......................................................................22
Section 5.16 Disbursements...........................................................................22
Section 5.17 Acceptance of Trust.....................................................................22
Section 5.18 Trustee Not Liable......................................................................23
ARTICLE 6
COMPENSATION
Section 6.1 Compensation and Reimbursement............................................................23
ARTICLE 7
INDEMNIFICATION AND LIMITATION OF LIABILITY
Section 7.1 Indemnification of the Trustee............................................................23
Section 7.2 Limitation of Liability...................................................................24
ARTICLE 8
CHANGE OF TRUSTEE
Section 8.1 Resignation...............................................................................24
Section 8.2 Removal...................................................................................25
Section 8.3 Successor Trustee.........................................................................25
Section 8.4 Notice of Successor Trustee...............................................................25
ARTICLE 9
PARENTCO SUCCESSORS
Section 9.1 Certain Requirements in Respect of Combination, Etc.......................................26
Section 9.2 Vesting of Powers in Successor............................................................26
Section 9.3 Wholly-owned Subsidiaries.................................................................26
ARTICLE 10
AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
Section 10.1 Amendments, Modifications, Etc..........................................................27
(ii)
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Section 10.2 Ministerial Amendments..................................................................27
Section 10.3 Meeting to Consider Amendments..........................................................27
Section 10.4 Changes in Capital of ParentCo and the Company..........................................28
Section 10.5 Execution of Supplemental Agreements....................................................28
ARTICLE 11
TERMINATION
Section 11.1 Term....................................................................................29
Section 11.2 Survival of Agreement...................................................................29
ARTICLE 12
GENERAL
Section 12.1 Severability............................................................................29
Section 12.2 Enurement...............................................................................29
Section 12.3 Notices to Parties......................................................................29
Section 12.4 Notice to Holders.......................................................................31
Section 12.5 Risk of Payments by Post................................................................32
Section 12.6 Counterparts............................................................................32
Section 12.7 Jurisdiction............................................................................32
Section 12.8 Attainment..............................................................................32
(iii)
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EXCHANGE TRUST AGREEMENT
THIS EXCHANGE TRUST AGREEMENT is entered into as of December 16, 1999,
by and between XXXXXX TECHNOLOGIES, INC., a corporation organized under the laws
of the State of Delaware ("PARENTCO") XXXXXX CALLCO CORPORATION, an unlimited
liability company existing, under the laws of the Province of Nova Scotia
("CALLCO"), and XXXXXX CANADA CORPORATION an unlimited liability company
existing under the laws of the Province of Nova Scotia (the "COMPANY"), the
Holders of Exchangeable Shares from time to time (the "HOLDERS"), and MONTREAL
TRUST COMPANY OF CANADA ("TRUSTEE").
WHEREAS, pursuant to a Share Purchase Agreement dated as of December
16, 1999, by and between the Company, Inlogic Software Inc., ParentCo. and the
holders of all of the issued and outstanding shares of Inlogic Software Inc.
(such agreement is hereinafter referred to as the "PURCHASE AGREEMENT") the
parties agreed that on the closing of the transaction contemplated under the
Purchase Agreement, ParentCo, the Company, the Holders and a trustee would
execute and deliver an Exchange Trust Agreement containing the terms and
conditions set forth in an Exhibit to the Purchase Agreement together with such
other terms and conditions as may be agreed to by the parties to the Purchase
Agreement acting reasonably.
WHEREAS, pursuant to the Purchase Agreement, the Company issued certain
exchangeable shares (the "EXCHANGEABLE SHARES") having attached thereto certain
rights, privileges, restrictions and conditions (collectively, the "EXCHANGEABLE
SHARE PROVISIONS" attached hereto as Schedule A).
WHEREAS, ParentCo is to grant to and in favour of the holders (other
than ParentCo and its Affiliates and Subsidiaries) from time to time of
Exchangeable Shares the right, in the circumstances set forth herein, to require
ParentCo to purchase from each such holder all or any part of the Exchangeable
Shares held by the holder;
WHEREAS, these recitals and any statements of fact in this Agreement
are made by ParentCo, CallCo and the Company and not by the Trustee.
NOW THEREFORE, in consideration of the respective covenants and
agreements provided in this agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
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ARTICLE 1
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS.
In this agreement, the following terms shall have the following
meanings:
"ACT" means the Companies Act (Nova Scotia);
"AFFILIATES" has the meaning provided in the Exchangeable Share
Provisions;
"AUTOMATIC EXCHANGE RIGHTS" means the benefit of the obligation of
ParentCo to effect the automatic exchange of ParentCo Common Stock for
Exchangeable Shares pursuant to Section 4.12 hereof;
"BOARD OF DIRECTORS" means the Board of Directors of the Company;
"BUSINESS DAY" has the meaning provided in the Exchangeable Share
Provisions;
"EXCHANGEABLE SHARE CONSIDERATION" has the meaning provided in the
Exchangeable Share Provisions;
"EXCHANGEABLE SHARE PRICE" has the meaning provided in the Exchangeable
Share Provisions;
"EXCHANGEABLE SHARE PROVISIONS" has the meaning provided in the
recitals hereto;
"EXCHANGEABLE SHARES" has the meaning provided in the recitals hereto;
"HOLDERS" means the registered holders from time to time of
Exchangeable Shares, other than ParentCo and its Affiliates and
Subsidiaries;
"INSOLVENCY EVENT" means the institution by the Company of any
proceeding to be adjudicated a bankrupt or insolvent or to be dissolved
or wound-up, or the consent of the Company to the institution of
bankruptcy, insolvency, dissolution or winding-up proceedings against
it, or the filing of a petition, answer or consent seeking dissolution
or winding-up under any bankruptcy, insolvency or analogous laws,
including without limitation the Companies Creditor, Arrangement Act
(Canada) and the Bankruptcy and Insolvency Act (Canada), and the
failure by the Company to contest in good faith any such proceedings
commenced in respect of the Company within 15 days of becoming aware
thereof, or the consent by the Company to the filing of any such
petition or to the appointment of a receiver, or the making by the
Company of a general assignment for the benefit of creditors, or the
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admission in writing by the Company of its inability to pay its debts
generally as they become due, or the Company's not being permitted,
pursuant to solvency requirements of applicable law, to redeem any
Retracted Shares pursuant to Section 6.6 of the Exchangeable Share
Provisions;
"INSOLVENCY EXCHANGE RIGHT" has the meaning provided in Article 4
hereof;
"LIQUIDATION CALL RIGHT" has the meaning provided in the Exchangeable
Share Provisions;
"LIQUIDATION EVENT" has the meaning provided in Subsection 4.12(1)(b)
hereof;
"LIQUIDATION EVENT EFFECTIVE TIME" has the meaning provided in
Subsection 4.12(3) hereof;
"OFFICER'S CERTIFICATE" means, with respect to ParentCo, CallCo or the
Company, as the case may be, a certificate signed by any one of the
Chairman of the Board, the President, any Executive Vice-President, any
Senior Vice-President, or any Vice-President of ParentCo, CallCo or the
Company, as the case may be;
"PARENTCO COMMON STOCK" has the meaning provided in the Exchangeable
Share Provisions;
"PARENTCO SUCCESSOR" has the meaning provided in Subsection 9.1(a)
hereof;
"PERSON" includes an individual, body corporate, partnership, company,
unincorporated syndicate or organization, trust, trustee, executor,
administrator and other legal representative;
"REDEMPTION CALL RIGHT" has the meaning provided in the Exchangeable
Share Provisions;
"RETRACTION REQUEST" has the meaning provided in the Exchangeable Share
Provisions;
"RETRACTED SHARES" has the meaning provided in Section 6.1(i) of the
Exchangeable Share Provisions hereof;
"RETRACTION CALL RIGHT" has the meaning provided in the Exchangeable
Share Provisions;
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"SUBSIDIARY" has the meaning provided in the Exchangeable Share
Provisions;
"SUPPORT AGREEMENT" means that certain support agreement made as of the
date hereof by and between ParentCo, CallCo, the Holders and the
Company and attached hereto as Schedule B;
"TRUST" means the trust created by this Agreement;
"TRUST ESTATE" means the Insolvency Exchange Right, the Automatic
Exchange Rights and any money or other property which may be held by
the Trustee from time to time pursuant to this Agreement; and
"TRUSTEE" means Montreal Trust Company of Canada and, subject to the
provisions of Article 8 hereof, includes any successor trustee or
permitted assigns.
SECTION 1.2 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of this agreement into articles, sections and paragraphs
and the insertion of headings are for convenience of reference only and shall
not affect the construction or interpretation of this Agreement.
SECTION 1.3 NUMBER, GENDER, ETC.
Words importing the singular number only shall include the plural and
vice versa. Words importing the use of any gender shall include all genders.
SECTION 1.4 DATE FOR ANY ACTION.
If any date on which any action is required to be taken under this
Agreement is not a Business Day, such action shall be required to be taken on
the next succeeding Business Day.
ARTICLE 2
PURPOSE OF AGREEMENT
SECTION 2.1 PURPOSE.
The purpose of this agreement is to create the Trust for the benefit of
the Holders, as herein provided. The Trustee will hold the Insolvency Exchange
Right and the Automatic Exchange Rights in order to enable the Trustee to
exercise such rights, in each case as trustee for and on behalf of the Holders
as provided in this Agreement.
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ARTICLE 3
PROVISION OF INFORMATION
SECTION 3.1 COPIES OF SHAREHOLDER INFORMATION
ParentCo will deliver to the Trustee copies of all proxy materials
(including notices of meetings of holders of ParentCo Common Stock, but
excluding proxies to vote ParentCo Common Stock), information statements,
reports (including without limitation all interim and annual financial
statements) and other written communications that there are to be distributed
from time to time to all of the holders of ParentCo Common Stock in sufficient
quantities and in sufficient time so as to enable the Trustee to send those
materials to each Holder at the same time as such materials are first sent to
holders of ParentCo Common Stock. The Trustee will mail or otherwise send to
each Holder, at the expense of ParentCo, copies of all such materials (and all
materials specifically directed to the Holders or to the Trustee for the benefit
of the Holders by ParentCo) received by the Trustee from ParentCo at the same
time as such materials are first sent to holders of ParentCo Common Stock. The
Trustee will make copies of all such materials available for inspection by any
Holder at the Trustee's principal corporate trust office in the City of Toronto.
SECTION 3.2 OTHER MATERIALS
Immediately after receipt by ParentCo or any member of ParentCo of any
material sent or given generally to the holders of ParentCo Common Stock by or
on behalf of a third party, including without limitation dissident proxy and
information circulars (and related information and material) and tender and
exchange offer circulars (and related information and material), ParentCo shall
obtain and deliver to the Trustee copies thereof in sufficient quantities so as
to enable the Trustee to forward such material (unless the same has been
provided directly to Holders by such third party) to each Holder as soon as
possible thereafter. As soon as practicable after receipt thereof, the Trustee
will mail or otherwise send to each Holder, at the expense of ParentCo, copies
of all such materials received by the Trustee from ParentCo. The Trustee will
also make copies of all such materials available for inspection by any Holder at
the Trustee's principal corporate trust office at the City of Toronto.
SECTION 3.3 DISTRIBUTION OF WRITTEN MATERIALS
Any written materials to be distributed by the Trustee to the Holders
pursuant to this Agreement shall be delivered or sent by mail (or otherwise
communicated in the same manner, subject to the Trustee being advised in writing
of such method of communication and its ability to provide such method, as
ParentCo uses in communications to holders of ParentCo Common Stock) to each
Holder at its address as shown on the books of the Company. The Company shall
provide or cause to be provided to the Trustee for this purpose, on a timely
basis and without charge or other expense:
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(a) Current and accurate lists of the Holders as reflected in the
Company records; and
(b) On the request of the Trustee, mailing labels to enable the
Trustee to carry out its duties under this agreement.
The materials referred to above are to be provided by the Company to
the Trustee in sufficient time to enable the Trustee to fulfil its obligations
as set out in Article 3.
ARTICLE 4
INSOLVENCY EXCHANGE RIGHT AND AUTOMATIC EXCHANGE RIGHTS
SECTION 4.1 GRANT AND OWNERSHIP OF THE INSOLVENCY EXCHANGE RIGHT.
(1) ParentCo hereby grants to the Trustee as trustee for and on behalf of,
and for the use and benefit of, the Holders
(a) the right (the "INSOLVENCY EXCHANGE RIGHT"), upon the
occurrence and during the continuance of an Insolvency Event
hereof, to require ParentCo to purchase from each or any
Holder all or any part of the Exchangeable Shares held by the
Holders, and
(b) the Automatic Exchange Rights,
all in accordance with the provisions of this Agreement. ParentCo hereby
acknowledges receipt from the Trustee as trustee for and on behalf of the
Holders of good and valuable consideration (and the adequacy thereof) for the
grant of the Insolvency Exchange Right and the Automatic Exchange Rights by
ParentCo to the Trustee. During the term of the Trust and subject to the terms
and conditions of this Agreement, the Trustee shall possess and be vested with
full legal ownership of the Insolvency Exchange Right and the Automatic Exchange
Rights and shall be entitled to exercise all of the rights and powers of an
owner with respect to the Insolvency Exchange Right and the Automatic Exchange
Rights, provided that the Trustee shall:
(c) hold the Insolvency Exchange Right and the Automatic Exchange
Rights and the legal title thereto as trustee solely for the
use and benefit of the Holders in accordance with the
provisions of this Agreement; and
(d) except as specifically authorized by this Agreement, have no
power or authority to exercise or otherwise deal in or with
the Insolvency Exchange Right and the Automatic Exchange
Rights, and the Trustee shall not exercise any such rights for
any purpose other than the purposes for which this Trust is
created pursuant to this Agreement.
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SECTION 4.2 LEGENDED SHARE CERTIFICATES.
(1) The Company shall ensure that each certificate representing
Exchangeable Shares bears an appropriate legend notifying the Holders
of:
(a) their right to instruct the Trustee with respect to the
exercise of the Insolvency Exchange Right in respect of the
Exchangeable Shares held by a Holder; and
(b) the Automatic Exchange Rights.
SECTION 4.3 GENERAL EXERCISE OF THE INSOLVENCY EXCHANGE RIGHT
(1) The Insolvency Exchange Right shall be and remain vested in and
exercised by the Trustee. Subject to Section 5.15 hereof, the Trustee
shall exercise the Insolvency Exchange Right only (i) on the basis of
instructions received pursuant to this Article 4 from Holders entitled
to instruct the Trustee as to the exercise thereof; or (ii) to the
extent that no instructions are received from a Holder with respect to
the Insolvency Exchange Right, the Trustee shall not exercise or permit
the exercise of the Insolvency Exchange Right.
SECTION 4.4 PURCHASE PRICE
(1) The purchase price payable by ParentCo for each Exchangeable Share to
be purchased by ParentCo under the Insolvency Exchange Right shall be
an amount equal to the Exchangeable Share Price on the last Business
Day prior to the day of closing of the purchase and sale of such
Exchangeable Share under the Insolvency Exchange Right. In connection
with each exercise of the Insolvency Exchange Right, ParentCo will
provide to the Trustee an Officer's Certificate setting forth the
calculation of the applicable Exchangeable Share Price for each
Exchangeable Share. The applicable Exchangeable Share Price for each
such Exchangeable Share so purchased may be satisfied only by ParentCo
delivering or causing to be delivered to the Trustee, on behalf of the
relevant Holder, the applicable Exchangeable Share Consideration
representing the total applicable Exchangeable Share Price. In
connection with payment of the Exchangeable Share Consideration,
ParentCo shall be entitled to withhold, sell or dispose of that number
of shares of ParentCo Common Stock otherwise deliverable to the
particular holder of Exchangeable Shares in order to satisfy any
statutory withholding tax obligation.
SECTION 4.5 EXERCISE INSTRUCTIONS
(1) Subject to the terms and conditions herein set forth, a Holder shall be
entitled, upon the occurrence and during the continuance of an
Insolvency Event, to instruct the Trustee to exercise the Insolvency
Exchange Right with respect to all of or any part of the Exchangeable
Shares registered in the name of such
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Holder on the books of the Company. To cause the exercise of the
Insolvency Exchange Right by the Trustee, the Holder shall deliver to
the Trustee, in person or by certified or registered mail, at its
principal corporate trust office in Toronto, Ontario or at such other
places in Canada as the Trustee may from time to time designate by
written notice to the Holders, the certificates representing the
Exchangeable Shares which such Holder desires ParentCo to purchase,
duly endorsed for transfer to ParentCo, and accompanied by such other
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the Act and; the constating documents of the
Company and such additional documents and instruments as the Trustee
may reasonably require, together with:
(a) a duly completed form of notice of exercise of the Insolvency
Exchange Right, contained on the reverse of or attached to the
Exchangeable Share certificates, stating:
(i) that the Holder thereby instructs the Trustee to
exercise the Insolvency Exchange Right so as to
require ParentCo to purchase from the Holder the
number of Exchangeable Shares specified therein,
(ii) that such Holder has good title to and owns all such
Exchangeable Shares to be acquired by ParentCo free
and clear of all liens, claims, encumbrances,
security interests and adverse claims or interests,
(iii) the name in which the certificates representing
ParentCo Common Stock issuable in connection with the
exercise of the Insolvency Exchange Right are to be
issued (which must be the name of the Holder), and
(iv) the names and addresses of the persons to whom the
Exchangeable Share Consideration should be delivered;
and
(b) payment (or evidence satisfactory to the Trustee, the Company,
CallCo and ParentCo of payment) of the taxes (if any) payable
as contemplated by Section 4.8 of this Agreement.
(2) If only a part of the Exchangeable Shares represented by any
certificate or certificates delivered to the Trustee are to be
purchased by ParentCo under the Insolvency Exchange Right, a new
certificate for the balance of such Exchangeable Shares shall be issued
to the Holder at the expense of the Company.
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SECTION 4.6 DELIVERY OF EXCHANGEABLE SHARE CONSIDERATION; EFFECT OF EXERCISE.
(1) Promptly after receipt of the certificates representing the
Exchangeable Shares which the Holder desires ParentCo to purchase under
the Insolvency Exchange Right (together with such documents and
instruments of transfer and a duly completed form of notice of exercise
of the Insolvency Exchange Right), duly endorsed for transfer to
ParentCo, the Trustee shall notify ParentCo and the Company of its
receipt of same, which notice to ParentCo and the Company shall
constitute exercise of the Insolvency Exchange Right by the Trustee on
behalf of the Holder of such Exchangeable Shares, and ParentCo shall
immediately thereafter deliver or cause to be delivered to the Trustee,
for delivery to the Holder of such Exchangeable Shares (or to such
other person, if any, properly designated by such Holder), the
Exchangeable Share Consideration deliverable in connection with the
exercise of the Insolvency Exchange Right; provided, however, that no
such delivery shall be made unless and until the Holder requesting the
same shall have paid (or provided evidence satisfactory to the Trustee,
the Company, CallCo and ParentCo of the payment of) the taxes (if any)
payable as contemplated by Section 4.8 of this Agreement. Immediately
upon the giving of notice by the Trustee to ParentCo and the Company of
the exercise of the Insolvency Exchange Right, as provided in this
Section 4.6, the closing of the transaction of purchase and sale
contemplated by the Insolvency Exchange Right shall be deemed to have
occurred, and the Holder of such Exchangeable Shares shall be deemed to
have transferred to ParentCo all of its right, title and interest in
and to such Exchangeable Shares and the related interest in the Trust
Estate, shall cease to be a holder of such Exchangeable Shares and
shall not be entitled to exercise any of the rights of a holder in
respect thereof, other than the right to receive the Exchangeable Share
Consideration, unless such Exchangeable Share Consideration is not
delivered or cause to be delivered by ParentCo to the Trustee, for
delivery to such Holder (or to such other persons, if any, properly
designated by such Holder), within three Business Days of the date of
the giving of such notice by the Trustee, in which case the rights of
the Holder shall remain unaffected until such Exchangeable Share
Consideration is delivered by ParentCo and any cheque included therein
is honoured. Upon delivery by ParentCo to the Trustee of such ParentCo
Common Stock, the Trustee shall deliver such ParentCo Common Stock to
such Holder (or to such other persons, if any, properly designated by
such Holder). Concurrently with such Holder ceasing to be a holder of
Exchangeable Shares, the Holder shall be considered and deemed for all
purposes to be the holder of the ParentCo Common Stock delivered to it
pursuant to the Insolvency Exchange Right.
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SECTION 4.7 EXERCISE OF THE INSOLVENCY EXCHANGE RIGHT IN OTHER CIRCUMSTANCES.
(1) In the event that a Holder has exercised its right under Article 6 of
the Exchangeable Share Provisions to require the Company to redeem any
or all of the Exchangeable Shares held by the Holder (the "RETRACTED
SHARES") and is notified by the Company pursuant to Section 6.6 of the
Exchangeable Share Provisions that the Company will not be permitted as
a result of solvency requirements under the Act to redeem all such
Retracted Shares, subject to receipt by the Trustee of the Retraction
Request from the Holder or the Company and provided that CallCo shall
not have exercised the Retraction Call Right with respect to the
Retracted Shares and that the Holder has not revoked the retraction
request delivered by the Holder to the Company pursuant to Section 6.8
of the Exchangeable Share Provisions and provided further that the
Trustee has received written notice of same from the Company or
ParentCo, the Retraction Request will constitute and will be deemed to
constitute notice from the Holder to the Trustee instructing the
Trustee to exercise the Insolvency Exchange Right with respect to those
Retracted Shares which the Company is unable to redeem. In any such
event, the Company hereby agrees with the Trustee and in favour of the
Holder immediately to notify the Trustee of such prohibition against
the Company's redeeming all of the Retracted Shares and immediately to
forward or cause to be forwarded to the Trustee all relevant materials
delivered by the Holder to the Company of the Exchangeable Shares
(including without limitation a copy of the Retraction Request
delivered pursuant to Section 6.1 of the Exchangeable Share Provisions)
in connection with such proposed redemption of the Retracted Shares,
and the Trustee will thereupon exercise the Insolvency Exchange Right
with respect to the Retracted Shares which the Company is not permitted
to redeem and will require ParentCo to purchase such shares in
accordance with the provisions of this Article 4.
(2) In any of the following circumstances, namely:
(a) Pursuant to Section 5.2 of the Exchangeable Share Provisions,
a Holder has not received within 30 days of the Liquidation
Date the full Exchangeable Share Consideration representing
such Holder's total Liquidation Amount, or
(b) Pursuant to Section 7.3 of the Exchangeable Share Provisions,
a Holder has not received, within 30 days of the Automatic
Redemption Date, the full Exchangeable Share Consideration
representing such Holder's total Redemption Price; or
(c) Pursuant to Section 6.5 of the Exchangeable Share Provisions,
a Holder has not received, within 30 days of the Retraction
Date, the full
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Exchangeable Share Consideration representing such Holder's
total Retraction Price for any reason whatsoever (other than a
circumstance set forth in Subsection 4.7(1) above);
the Holder may notify the Trustee in writing of such
circumstance, with a copy to CallCo and, provided that CallCo
has not exercised its Liquidation Call Right, Retraction Call
Right or Redemption Call Right, as the case may be, such
notice will constitute and will be deemed to constitute notice
from such Holder to the Trustee instructing the Trustee to
exercise the Insolvency Exchange Right with respect to the
Exchangeable Shares which are the subject of such notice. The
Trustee will thereupon exercise the Insolvency Exchange Right
with respect to the Exchangeable Shares which are the subject
of such notice and will require ParentCo to purchase such
Exchangeable Shares in accordance with the provisions of this
Article 4, mutatis mutandis, with the provisions applicable
upon the occurrence of an Insolvency Event. ParentCo hereby
agrees to purchase such Exchangeable Shares for the full
Exchangeable Share Consideration applicable thereto
immediately following receipt of any such notice.
SECTION 4.8 STAMP OR OTHER TRANSFER TAXES.
(1) Upon any sale of Exchangeable Shares to ParentCo pursuant to the
Insolvency Exchange Right or the Automatic Exchange Rights, the share
certificate or certificates representing ParentCo Common Stock to be
delivered in connection with the payment of the total purchase price
therefor shall be issued in the name of the Holder of the Exchangeable
Shares so sold or in such names as such Holder may otherwise direct in
writing without charge to the holder of the Exchangeable Shares so
sold, provided, however, that such Holder:
(a) shall pay any documentary, stamp or transfer taxes required by
law to be paid by the Holder that may be payable in respect of
any transfer involved in the issuance or delivery of such
shares to a person other than such Holder; or
(b) shall have established to the satisfaction of the Trustee,
ParentCo and the Company acting in good faith and reasonably,
that such taxes, if any, have been paid.
SECTION 4.9 NOTICE OF INSOLVENCY EVENT
(1) Immediately upon the occurrence of an Insolvency Event or any event
that with the giving of notice or the passage of time or both would be
an Insolvency Event, the Company and ParentCo shall give written notice
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thereof to the Trustee. As soon as practicable after receiving notice
from the Company or ParentCo of the occurrence of an Insolvency Event,
the Trustee will mail to each Holder, at the expense of ParentCo, a
notice of such Insolvency Event in the form provided by ParentCo, which
notice shall contain a brief statement of the right of the Holders with
respect to the Insolvency Exchange Right.
SECTION 4.10 QUALIFICATION OF PARENTCO COMMON STOCK
(1) ParentCo covenants that if any ParentCo Common Stock to be issued and
delivered pursuant to the Insolvency Exchange Right or the Automatic
Exchange Rights require registration or qualification with or approval
of or the filing of any document including any prospectus or similar
document, the taking of any proceeding with or the obtaining of any
order, ruling or consent from any governmental or regulatory authority
under any Canadian or United States federal, provincial or state law or
regulation or pursuant to the rules and regulations of any regulatory
authority, or the fulfilment of any other legal requirement
(collectively, the "Applicable Laws") before such shares may be issued
and delivered by ParentCo to the initial holder thereof (other than the
Company), ParentCo will in good faith expeditiously take all such
actions and do all such things as are necessary or desirable to cause
such ParentCo Common Stock to be and remain duly registered, qualified
or approved to the extent expressly provided in the Purchase Agreement
and the Registration Rights Agreement. ParentCo Common Stock shall be
issued pursuant to an exemption from registration under Applicable Laws
and shall not be freely tradeable. ParentCo will in good faith
expeditiously take all such actions and do all such things as are
reasonably necessary or desirable to cause all ParentCo Common Stock to
be delivered pursuant to the Insolvency Exchange Rights or the
Automatic Exchange Rights to be listed, quoted or posted for trading on
all stock exchanges and quotation systems on which outstanding ParentCo
Common Stock have been listed by ParentCo and remain listed and are
quoted or posted for trading at such time.
(2) ParentCo hereby represents, warrants and covenants that the ParentCo
Common Stock issuable as described herein will be duly authorized and
validly issued as fully paid and non-assessable.
SECTION 4.11 RESERVATION OF PARENTCO COMMON STOCK.
(1) ParentCo hereby represents, warrants and covenants that it has reserved
for issuance and will at all times keep available, free from
pre-emptive rights and out of its authorized and unissued capital
shares such number of ParentCo Common Stock:
(a) as is equal to the sum of
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(i) the number of Exchangeable Shares issued and
outstanding from time to time, and
(ii) the number of Exchangeable Shares issuable upon the
exercise of all rights to acquire Exchangeable Shares
outstanding from time to time; and
(b) as are now and may hereafter be required to enable and permit
ParentCo, the Company or CallCo to meet its obligations
hereunder, under the Support Agreement and under the
Exchangeable Share Provisions with respect to which ParentCo
may now or hereafter be required to issue ParentCo Common
Stock.
(2) ParentCo shall provide notice on a timely basis to the Trustee with
respect to any adjustment to the number of ParentCo Common Stock
reserved for issuance pursuant to Section 4.11(1)(a) and (b).
SECTION 4.12 AUTOMATIC EXCHANGE ON LIQUIDATION OF PARENTCO.
(1) ParentCo shall give the Trustee written notice of each of the following
events at the time set forth below:
(a) in the event of any determination by the board of directors of
ParentCo to institute voluntary liquidation, dissolution or
winding-up proceedings with respect to ParentCo or to effect
any other distribution of assets of ParentCo among its
shareholders for the purpose of winding up its affairs, at
least 60 days prior to the proposed effective date of such
liquidation, dissolution, winding-up or other distribution;
and
(b) immediately, upon the earlier of
(i) receipt by ParentCo of notice of; and
(ii) ParentCo's otherwise becoming aware of,
any threatened or instituted claim, suit, petition or other
proceedings with respect to the involuntary liquidation,
dissolution or winding-up of ParentCo or to effect any other
distribution of assets of ParentCo among its shareholders for
the purpose of winding up its affairs.
(2) Immediately following receipt by the Trustee from ParentCo of notice of
any event (a "LIQUIDATION Event") contemplated by Section 4.12(1)
above, the Trustee will give notice thereof to the Holders. Such notice
provided by ParentCo to the Trustee shall include a brief description
of the automatic
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exchange of Exchangeable Shares for ParentCo Common Stock provided for
in Section 4.12(3) below.
(3) In order that the Holders will be able to participate on a pro rata
basis with the holders of ParentCo Common Stock in the distribution of
assets of ParentCo in connection with a Liquidation Event, immediately
prior to the effective time (the "LIQUIDATION EVENT EFFECTIVE TIME") of
a Liquidation Event, all of the then outstanding Exchangeable Shares
shall be automatically exchanged for ParentCo Common Stock. To effect
such automatic exchange, ParentCo shall be deemed to have purchased
each Exchangeable Share outstanding immediately prior to the
Liquidation Event Effective Time held by Holders, and each Holder shall
be deemed to have sold the Exchangeable Shares held by it at such time,
for a purchase price per share equal to the Exchangeable Share Price
applicable at such time. In connection with such automatic exchange,
ParentCo will provide to the Trustee an Officer's Certificate setting
forth the calculation of the purchase price for each Exchangeable
Share.
(4) The closing of the transaction of purchase and sale contemplated by
Section 4.12(3) above shall be deemed to have occurred immediately
prior to the Liquidation Event Effective Time, and each Holder of
Exchangeable Shares shall be deemed to have transferred to ParentCo all
of the Holder's right, title and interest in and to such Exchangeable
Shares and the related interest in the Trust Estate and shall cease to
be a holder of such Exchangeable Shares, and ParentCo shall deliver or
cause to be delivered to the Holder the Exchangeable Share
Consideration deliverable upon the automatic exchange of Exchangeable
Shares. Concurrently with such Holder's ceasing to be a holder of
Exchangeable Shares, the Holder shall be considered and deemed for all
purposes to be the holder of the ParentCo Common Stock issued to it
pursuant to the automatic exchange of Exchangeable Shares for ParentCo
Common Stock, and the certificates held by the Holder previously
representing the Exchangeable Shares exchanged by the Holder with
CallCo pursuant to such automatic exchange shall thereafter be deemed
to represent the ParentCo Common Stock delivered to the Holder by
ParentCo pursuant to such automatic exchange. Upon the request of a
Holder and the surrender by the Holder of Exchangeable Share
certificates to ParentCo deemed to represent ParentCo Common Stock,
duly endorsed for transfer to ParentCo and accompanied by such
instruments of transfer as ParentCo may reasonably require, ParentCo
shall deliver or cause to be delivered to the Holder certificates
representing the ParentCo Common Stock of which the Holder is the
holder.
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SECTION 4.13 WITHHOLDING RIGHTS
ParentCo and CallCo shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
Exchangeable Shares such amounts as ParentCo and CallCo is required by law to
deduct and withhold with respect to the making of such payment under the United
States Internal Revenue Code of 1986, as amended, the Income Tax Act (Canada) or
any applicable provision of state, local, provincial or foreign tax law. To the
extent that amounts are so withheld, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the holder of the shares
in respect of which such deduction and withholding was made, provided that such
withheld amounts are actually remitted to the appropriate taxing authority
within the applicable time limits. To the extent that the amount so required to
be deducted or withheld from any payment to a holder exceeds the cash portion of
the consideration otherwise payable to the holder and ParentCo are hereby
authorized to withhold, sell, or otherwise dispose of at fair market value such
portion of such consideration as is necessary to provide sufficient funds to
ParentCo or CallCo, as the case may be, in order to enable it to comply with
such deduction or withholding requirement and ParentCo and CallCo shall give an
accounting to the holder with respect thereto and any balance of such sale
proceeds.
ARTICLE 5
CONCERNING THE TRUSTEE
SECTION 5.1 POWERS AND DUTIES OF THE TRUSTEE.
(1) The rights, powers and authorities of the Trustee under this Agreement,
in its capacity as trustee of the Trust, shall include:
(a) distributing materials to Holders as provided in this
Agreement;
(b) receiving the grant of the Insolvency Exchange Right and the
Automatic Exchange Rights from CallCo as trustee for and on
behalf of the Holders in accordance with the provisions of
this Agreement;
(c) exercising the Insolvency Exchange Right and enforcing the
benefit of the Automatic Exchange Rights, in each case in
accordance with the provisions of this Agreement, and in
connection therewith receiving from Holders Exchangeable
Shares and other requisite documents and distributing to such
Holders the CallCo Common Stock and cheques, if any, to which
such Holders are entitled upon the exercise of the Insolvency
Exchange Right or pursuant to the Automatic Exchange Rights,
as the case may be;
(d) holding title to the Trust Estate;
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(e) investing any moneys forming, from time to time, a part of the
Trust Estate as provided in this Agreement;
(f) taking action at the direction of a Holder or Holders to
enforce the obligations of CallCo under this Agreement; and
(g) taking such other actions and doing such other things as are
specifically provided in this Agreement.
(2) In the exercise of such rights, powers and authorities the Trustee
shall have (and is granted) such incidental and additional rights,
powers and authority not in conflict with any of the provisions of this
Agreement as the Trustee, acting in good faith and in the reasonable
exercise of its discretion, may deem necessary, appropriate or
desirable to effect the purpose of the Trust. Any exercise of such
discretionary rights, powers and authorities by the Trustee shall be
final, conclusive and binding upon all Persons. For greater certainty,
the Trustee shall have only those duties as are set out specifically in
this Agreement. The Trustee in exercising its rights, powers, duties
and authorities hereunder shall act honestly and in good faith with a
view to the best interests of the Holders and shall exercise the care,
diligence and skill that a reasonably prudent trustee would exercise in
comparable circumstances. The Trustee shall not be bound to give any
notice or do or take any act, action or proceeding by virtue of the
powers conferred on it hereby unless and until it shall be specifically
required to do so under the terms hereof; nor shall the Trustee be
required to take any notice of, or to do or to take any act, action or
proceeding as a result of any default or breach of any provision
hereunder, unless and until notified in writing of such default or
breach, which notices shall distinctly specify the default or breach
desired to be brought to the attention of the Trustee and in the
absence of such notice the Trustee may for all purposes of this
Agreement conclusively assume that no default or breach has been made
in the observance or performance of any of the representations,
warranties, covenants, agreements or conditions contained herein.
SECTION 5.2 NO CONFLICT OF INTEREST.
The Trustee represents to the Holders, the Company and CallCo that at
the date of execution and delivery of this Agreement there exists no material
conflict of interest in the role of the Trustee as a fiduciary hereunder and the
role of the Trustee in any other capacity. The Trustee shall, within 90 days
after it becomes aware that such a material conflict of interest exists, either
eliminate such material conflict of interest or resign in the manner and with
the effect specified in Article 8 hereof. If, notwithstanding the foregoing
provisions of this Section 5.2, the Trustee has such a material conflict of
interest, the validity and enforceability of this Agreement shall
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not be affected in any manner whatsoever by reason only of the existence of such
material conflict of interest. If the Trustee contravenes the foregoing
provisions of this Section 5.2, any interested party may apply to the Ontario
Court (General Division) for an order that the Trustee be replaced as trustee
hereunder.
SECTION 5.3 DEALINGS WITH TRANSFER AGENTS, REGISTRARS, ETC.
(1) The Company, CallCo and ParentCo irrevocably authorize the Trustee,
from time to time, to:
(a) consult, communicate and otherwise deal with the respective
registrars and transfer agents, and with any such subsequent
registrar or transfer agent, of the Exchangeable Shares and
ParentCo Common Stock; and
(b) requisition, from time to time, from any such registrar or
transfer agent any information readily available from the
records maintained by it which the Trustee may reasonably
require for the discharge of its duties and responsibilities
under this Agreement; and
(2) The Company, CallCo and ParentCo irrevocably authorize their respective
registrars and transfer agents to comply with all such requests. Each
of CallCo and ParentCo covenants that it will supply its transfer agent
with duly executed share certificates for the purpose of completing the
exercise from time to time of the Insolvency Exchange Right and the
Automatic Exchange Rights, in each case pursuant to Article 4 hereof.
SECTION 5.4 BOOKS AND RECORDS.
(1) The Trustee shall keep available for inspection by ParentCo, CallCo the
Holders and the Company, at the Trustee's principal corporate trust
office in Toronto, Ontario, correct and complete books and records of
account relating to the Trustee's actions under this Agreement,
including without limitation all information relating to mailings and
instructions to and from Holders and all transactions pursuant to the
Insolvency Exchange Right and the Automatic Exchange Rights for the
term of this Agreement. On or before March 31 in every year after the
date hereof, the Trustee shall transmit to CallCo, the Holders and the
Company a brief report, dated as of the preceding December 30, with
respect to:
(a) property and funds comprising the Trust Estate as of that
date;
(b) the number of exercises of the Insolvency Exchange Right, if
any, and the aggregate number of Exchangeable Shares received
by the Trustee on behalf of Holders in consideration of the
issue and delivery by CallCo of ParentCo Common Stock in
connection with the Insolvency Exchange Right, during the
calendar year ended on such date; and
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(c) all other actions taken by the Trustee in the performance of
its duties under this Agreement which it had not previously
reported.
SECTION 5.5 INCOME TAX RETURNS AND REPORTS.
The Trustee shall, if so advised by the Company or CallCo, prepare and
file on behalf of the Trust appropriate United States and Canadian income tax
returns and, if applicable, any other returns or reports as may be required by
applicable law, and, in connection therewith, may obtain the advice and
assistance of such experts as the Trustee may consider necessary or advisable.
If requested by the Trustee, ParentCo or CallCo shall retain such experts for
purposes of providing such advice and assistance.
SECTION 5.6 INDEMNIFICATION PRIOR TO CERTAIN ACTIONS BY TRUSTEE.
The Trustee shall exercise any or all of the rights, duties, powers or
authorities vested in it by this Agreement at the request, order or direction of
any Holder upon such Holder's furnishing to the Trustee reasonable funding,
security and indemnity against the costs, expenses and liabilities which may be
incurred by the Trustee therein or thereby; provided that no Holder shall be
obligated to furnish to the Trustee any such funding, security or indemnity in
connection with the exercise by the Trustee of any of its rights, duties, powers
and authorities with respect to Article 3 hereof, subject to Section 5.15
hereof, and with respect to the Insolvency Exchange Right pursuant to Article 4
hereof, subject to Section 5.15 hereof, and with respect to the Automatic
Exchange Rights pursuant to Article 4 hereof. None of the provisions contained
in this Agreement shall require the Trustee to expend or risk its own funds or
otherwise incur financial liability in the exercise of any of its rights,
powers, duties or authorities unless funded, given funds, security and
indemnified as aforesaid.
SECTION 5.7 ACTIONS BY HOLDERS.
No Holder shall have the right to institute any action, suit or
proceeding or to exercise any other remedy authorized by this Agreement for the
purpose of enforcing any of its rights or for the execution of any trust or
power hereunder unless the Holder has requested the Trustee to take or institute
such action, suit or proceeding and furnished the Trustee with the funding,
security and indemnity referred to in Section 5.6 hereof and the Trustee shall
have failed to act within a reasonable time thereafter. In such case, but not
otherwise, the Holder shall be entitled to take proceedings in any court of
competent jurisdiction such as the Trustee might have taken; it being understood
and intended that no one or more Holders shall have any right in any manner
whatsoever to affect, disturb or prejudice the rights hereby created by any such
action, or to enforce any right hereunder or under the Insolvency Exchange Right
or the Automatic Exchange Rights, except subject to the conditions and in the
manner herein provided, and that all powers and trusts hereunder shall be
exercised and all proceedings at law shall
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be instituted, had and maintained by the Trustee, except only as herein
provided, and in any event for the equal benefit of all Holders.
SECTION 5.8 RELIANCE UPON DECLARATIONS.
The Trustee shall not be considered to be in contravention of any of
its rights, powers, duties and authorities hereunder if, when required, it acts
and relies in good faith upon lists, mailing labels, notices, statutory
declarations, certificates, opinions, reports or other papers or documents
furnished pursuant to the provisions hereof or required by the Trustee to be
furnished to it in the exercise of its rights, powers, duties and authorities
hereunder, and such lists, mailing labels, notices, statutory declarations,
certificates, opinions, reports or other papers or documents comply with the
provisions of Section 5.9 hereof, if applicable, and with any other applicable
provisions of this Agreement.
SECTION 5.9 EVIDENCE AND AUTHORITY TO TRUSTEE.
(1) The Company and/or ParentCo and/or CallCo shall furnish to the Trustee
evidence of compliance with the conditions provided for in this
Agreement relating to any action or step required or permitted to be
taken by the Company and/or ParentCo and/or CallCo or the Trustee under
this Agreement or as a result of any obligation imposed under this
Agreement, including, without limitation, in respect of and the
Insolvency Exchange Right or the Automatic Exchange Rights and the
taking of any other action to be taken by the Trustee at the request of
or on the application of the Company and/or ParentCo and/or CallCo
forthwith if and when:
(a) such evidence is required by any other section of this
Agreement to be furnished to the Trustee in accordance with
the terms of this Section 5.9; or
(b) the Trustee, in the exercise of its rights, powers, duties and
authorities under this Agreement, gives the Company and/or
ParentCo and/or CallCo written notice requiring it to furnish
such evidence in relation to any particular action or
obligation specified in such notice.
(2) Such evidence shall consist of an Officer's Certificate of the Company
and/or ParentCo and/or CallCo or a statutory declaration or a
certificate made by persons entitled to sign an Officer's Certificate
stating that any such condition has been complied with in accordance
with the terms of this Agreement.
(3) Whenever such evidence relates to a matter other than the Insolvency
Exchange Right or the Automatic Exchange Rights, and except as
otherwise specifically provided herein, such evidence may consist of a
report or opinion of any solicitor, auditor, accountant, appraiser,
valuer, engineer or other expert or any other person whose
qualifications give authority to a statement
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made by him, provided that if such report or opinion is furnished by a
director, officer or employee of the Company and/or ParentCo and/or
CallCo it shall be in the form of an Officer's Certificate or a
statutory declaration.
(4) Each statutory declaration, certificate, opinion or report furnished to
the Trustee as evidence of compliance with a condition provided for in
this Agreement shall include a statement by the person giving the
evidence:
(a) declaring that he has read and understands the provisions of
this Agreement relating to the condition in question;
(b) describing the nature and scope of the examination or
investigation upon which he based the statutory declaration,
certificate, statement or opinion; and
(c) declaring that he has made such examination or investigation
as he believes is necessary to enable him to make the
statements or give the opinions contained or expressed
therein.
SECTION 5.10 EXPERTS, ADVISERS AND AGENTS.
(1) The Trustee may:
(a) in relation to these presents act and rely on the opinion or
advice of or information obtained from or prepared by any
solicitor, auditor, accountant, appraiser, valuer, engineer or
other expert, whether retained by the Trustee or by the
Company and/or ParentCo and/or CallCo or otherwise, and may
employ such assistants as may be necessary to the proper
determination and discharge of its powers and duties and
determination of its rights hereunder and may pay proper and
reasonable compensation for all such legal and other advice or
assistance as aforesaid; and
(b) employ such agents and other assistants as it may reasonably
require for the proper determination and discharge of its
powers and duties hereunder, and may pay reasonable
remuneration for all services performed for it (and shall be
entitled to receive reasonable remuneration for all services
performed by it) in the discharge of the trusts hereof and
compensation for all disbursements, costs and expenses made or
incurred by it in the determination and discharge of its
duties hereunder and in the management of the Trust.
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SECTION 5.11 INVESTMENT OF MONEYS HELD BY TRUSTEE.
Unless otherwise provided in this Agreement, any moneys held by or on
behalf of the Trustee which under the terms of this Agreement may or ought to be
invested or which may be on deposit with the Trustee or which may be in the
hands of the Trustee, may be invested and reinvested in the name or under the
control of the Trustee in securities in which, under the laws of the Province of
Ontario, trustees are authorized to invest trust moneys; provided that such
securities are stated to mature within two years after their purchase by the
Trustee, and the Trustee shall so invest such moneys on the written direction of
the Holders. Pending the investment of any moneys as hereinbefore provided, such
moneys may be deposited in the name of the Trustee in any chartered bank in
Canada or in the deposit department of the Trustee or any other loan or trust
company authorized to accept deposits under the laws of Canada or any province
thereof at the rate of interest then current on similar deposits.
SECTION 5.12 TRUSTEE NOT REQUIRED TO GIVE SECURITY.
The Trustee shall not be required to give any bond or security in
respect of the execution of the trusts, rights, duties, powers and authorities
of this Agreement or otherwise in respect of the premises.
SECTION 5.13 TRUSTEE NOT BOUND TO ACT ON REQUEST.
Except as in this Agreement otherwise specifically provided, the
Trustee shall not be bound to act in accordance with any direction or request of
the Company, CallCo and/or ParentCo or of the directors thereof until a duly
authenticated copy of the instrument or resolution containing such direction or
request shall have been delivered to the Trustee, and the Trustee shall be
empowered to act and rely upon any such copy purporting to be authenticated and
believed by the Trustee to be genuine.
SECTION 5.14 AUTHORITY TO CARRY ON BUSINESS.
The Trustee represents and warrants to the Company, ParentCo and CallCo
that at the date of execution and delivery by it of this Agreement it is
authorized to carry on the business of a trust company in the Province of
Ontario but if, notwithstanding the provisions of this Section 5.14, it ceases
to be so authorized to carry on business, the validity and enforceability of
this Agreement and the Insolvency Exchange Right and the Automatic Exchange
Rights shall not be affected in any manner whatsoever by reason only of such
event; provided, however, the Trustee shall, within 90 days after ceasing to be
authorized to carry on the business of a trust company in the Province of
Ontario, either become so authorized or resign in the manner and with the effect
specified in Article 8 hereof.
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SECTION 5.15 CONFLICTING CLAIMS.
(1) If conflicting claims or demands are made or asserted with respect to
any interest of any Holder in any Exchangeable Shares, including any
disagreement between the heirs, representatives, successors or assigns
succeeding to all or any part of the interest of any Holder in any
Exchangeable Shares resulting in conflicting claims or demands being
made in connection with such interest, then the Trustee shall be
entitled, at its sole discretion, to refuse to recognize or to comply
with any such claim or demand. In so refusing, the Trustee may elect
not to exercise any Insolvency Exchange Right or Automatic Exchange
Rights subject to such conflicting claims or demands and, in so doing,
the Trustee shall not be or become liable to any person on account of
such election or its failure or refusal to comply with any such
conflicting claims or demands. The Trustee shall be entitled to
continue to refrain from acting and to refuse to act until:
(a) the rights of all adverse claimants with respect to the
Insolvency Exchange Right or Automatic Exchange Rights subject
to such conflicting claims or demands have been adjudicated by
a final judgement of a court of competent jurisdiction; or
(b) all differences with respect to the Insolvency Exchange Right
or Automatic Exchange Rights subject to such conflicting
claims or demands have been conclusively settled by a valid
written agreement binding on all such adverse claimants, and
the Trustee shall have been furnished with an executed copy of
such agreement.
(2) If the Trustee elects to recognize any claim or comply with any demand
made by any such adverse claimant, it may in its discretion require
such claimant to furnish such surety bond or other security
satisfactory to the Trustee as it shall deem appropriate fully to
indemnify it as between all conflicting claims or demands.
SECTION 5.16 DISBURSEMENTS.
The Trustee shall not be obligated to disburse any funds beyond those
which have been deposited with it and which remain in the Trust at the time of
any requirement that the Trustee disburse such funds.
SECTION 5.17 ACCEPTANCE OF TRUST.
The Trustee hereby accepts the Trust created and provided for by and in
this Agreement and agrees to perform the same upon the terms and conditions
herein set forth and to hold all rights, privileges and benefits conferred
hereby and by law in trust for the various persons who shall from time to time
be Holders, subject to all the terms and conditions herein set forth.
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SECTION 5.18 TRUSTEE NOT LIABLE.
The Trustee shall not be responsible for the validity or quantity of
shares or securities that it receives as a result of an exchange.
ARTICLE 6
COMPENSATION
SECTION 6.1 COMPENSATION AND REIMBURSEMENT.
ParentCo, CallCo and the Company jointly and severally agree to pay to
the Trustee reasonable compensation for all of the services rendered by it under
this Agreement and will reimburse the Trustee for all reasonable expenses
(including but not limited to taxes, compensation paid to experts, agents and
advisors and travel expenses) and disbursements, including the cost and expense
of any suit or litigation of any character and any proceedings before any
governmental agency, reasonably incurred by the Trustee in connection with its
rights and duties under this Agreement; provided that ParentCo, CallCo and the
Company shall have no obligation to reimburse the Trustee for any expenses or
disbursements paid, incurred or suffered by the Trustee in any suit or
litigation in which the Trustee is determined to have acted in bad faith or with
negligence or wilful misconduct. Any and all accounts for services rendered
hereunder shall be sent by the Trustee to the Company at the address noted in
Section 12.3.
ARTICLE 7
INDEMNIFICATION AND LIMITATION OF LIABILITY
SECTION 7.1 INDEMNIFICATION OF THE TRUSTEE.
ParentCo, CallCo and the Company jointly and severally agree to
indemnify and hold harmless the Trustee and each of its directors, officers,
employees and agents appointed and acting in accordance with this agreement
(collectively, the "INDEMNIFIED PARTIES") against all claims, losses, damages,
costs, penalties, fines and reasonable expenses (including reasonable expenses
of the Trustee's legal counsel) which, without fraud, negligence, wilful
misconduct or bad faith on the part of such Indemnified Party, may be paid,
incurred or suffered by the Indemnified Party by reason of or as a result of the
Trustee's acceptance or administration of the Trust, its compliance with its
duties set forth in this Agreement, or any written or oral instructions
delivered to the Trustee by ParentCo, CallCo or the Company pursuant hereto. In
no case shall ParentCo, CallCo or the Company be liable under this indemnity for
any claim against any of the Indemnified Parties unless ParentCo, CallCo and the
Company shall be notified by the Trustee of the written assertion of a claim or
of any action commenced against the Indemnified Parties, promptly after any of
the Indemnified Parties shall have received any such written assertion of a
claim or shall have been served with a summons or other first legal process
giving
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information as to the nature and basis of the claim. Subject to (i) below,
ParentCo, CallCo and the Company shall be entitled to participate at their own
expense in the defence and, if ParentCo, CallCo or the Company so elect at any
time after receipt of such notice, either of them may assume the defence of any
suit brought to enforce any such claim. The Trustee shall have the right to
employ separate counsel in any such suit and participate in the defence thereof,
but the fees and expenses of such counsel shall be at the expense of the Trustee
unless: (i) the employment of such counsel has been authorized by ParentCo or
the Company, such authorization not to be unreasonably withheld; or (ii) the
named parties to any such suit include both the Trustee and CallCo or ParentCo
or the Company and the Trustee shall have been advised by counsel acceptable to
ParentCo, CallCo or the Company that there may be one or more legal defenses
available to the Trustee that are different from or in addition to those
available to ParentCo, CallCo or the Company and that an actual or potential
conflict of interest exists (in which case ParentCo, CallCo and the Company
shall not have the right to assume the defense of such suit on behalf of the
Trustee, but shall be liable to pay the reasonable fees and expenses of counsel
for the Trustee). Such indemnification shall survive the resignation or removal
of the Trustee and the termination of this Agreement.
SECTION 7.2 LIMITATION OF LIABILITY.
The Trustee shall not be held liable for any loss which may occur by
reason of depreciation of the value of any part of the Trust Estate or any loss
incurred on any investment of funds pursuant to this Agreement, except to the
extent that such loss is attributable to the fraud, negligence, wilful
misconduct or bad faith on the part of the Trustee.
ARTICLE 8
CHANGE OF TRUSTEE
SECTION 8.1 RESIGNATION.
The Trustee, or any trustee hereafter appointed, may at any time resign
by giving written notice of such resignation to ParentCo, CallCo, the Holders
and the Company specifying the date on which it desires to resign, provided that
such notice shall never be given less than 60 days before such desired
resignation date unless ParentCo, CallCo the Holders and the Company otherwise
agree and provided further that such resignation shall not take effect until the
date of the appointment of a successor trustee and the acceptance of such
appointment by the successor trustee. Upon receiving such notice of resignation,
ParentCo, CallCo, the Holders and the Company shall promptly appoint a successor
trustee by written instrument in duplicate, one copy of which shall be delivered
to the resigning trustee and one copy to the successor trustee. Failing
acceptance by a successor
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trustee, a successor trustee may be appointed by an order of the Ontario
Superior Court of Justice upon application of one or more of the parties hereto.
SECTION 8.2 REMOVAL.
The Trustee, or any trustee hereafter appointed, may be removed with or
without cause, at any time on 60 days' prior notice by written instrument
executed by ParentCo, CallCo, the Holders and the Company, in duplicate, one
copy of which shall be delivered to the trustee so removed and one copy to the
successor trustee, provided that, in connection with such removal, provision is
made for a replacement trustee similar to that contemplated in Section 8.1.
SECTION 8.3 SUCCESSOR TRUSTEE.
Any successor trustee appointed as provided under this Agreement shall
execute, acknowledge and deliver to ParentCo, CallCo, Holders and the Company
and to its predecessor trustee an instrument accepting such appointment.
Thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessor under this Agreement, with like effect as if
originally named as trustee in this Agreement. However, on the written request
of ParentCo, CallCo, the Holders and the Company or of the successor trustee,
the trustee ceasing to act shall, upon payment of any amounts then due it
pursuant to the provisions of this Agreement, execute and deliver an instrument
transferring to such successor trustee all the rights and powers of the trustee
so ceasing to act. Upon the request of any such successor trustee, ParentCo,
CallCo, the Holders, the Company and such predecessor trustee shall execute any
and all instruments in writing for more fully and certainly vesting in and
confirming to such successor trustee all such rights and powers.
SECTION 8.4 NOTICE OF SUCCESSOR TRUSTEE.
Upon acceptance of appointment by a successor trustee as provided
herein, ParentCo, CallCo and the Company shall cause to be mailed notice of the
succession of such trustee hereunder to each Holder. If ParentCo, CallCo or the
Company shall fail to cause such notice to be mailed within 10 days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of ParentCo, CallCo and the
Company.
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ARTICLE 9
PARENTCO SUCCESSORS
SECTION 9.1 CERTAIN REQUIREMENTS IN RESPECT OF COMBINATION, ETC.
(1) ParentCo shall not enter into any transaction (whether by way of
reconstruction, reorganization, consolidation, merger or otherwise),
unless:
(a) such other Person or continuing company (the "PARENTCO
SUCCESSOR"), by operation of law, becomes, without more, bound
by the terms and provisions of this Agreement or, if not so
bound, executes, prior to or contemporaneously with the
consummation of such transaction an agreement supplemental
hereto and such other instruments (if any) as are necessary or
advisable to evidence the assumption by the ParentCo Successor
of liability for all moneys payable and property deliverable
hereunder, the covenant of such ParentCo Successor to pay and
deliver or cause to be delivered the same and its agreement to
observe and perform all the covenants and obligations of
ParentCo under this Agreement; and
(b) such transaction shall be upon such terms to the satisfaction
of the Trustee and in the opinion of legal counsel to the
Trustee, acting reasonably, which substantially preserve and
do not impair in any material respect any of the rights,
duties, powers and authorities of the Trustee or of the
Holders hereunder.
SECTION 9.2 VESTING OF POWERS IN SUCCESSOR.
In the event that Section 9.1 hereof applies, the Trustee, the ParentCo
Successor, CallCo, the Holders and the Company shall execute and deliver the
supplemental agreement provided for in Article 10 hereof, and thereupon the
ParentCo Successor shall possess and from time to time may exercise each and
every right and power of ParentCo under this Agreement in the name of ParentCo
or otherwise and any act or proceeding by any provision of this Agreement
required to be done or performed by the board of directors of ParentCo or any
officers of ParentCo may be done and performed with like force and effect by the
directors or officers of such ParentCo Successor.
SECTION 9.3 WHOLLY-OWNED SUBSIDIARIES
Nothing herein shall be construed as preventing the amalgamation or
merger of any wholly-owned subsidiary of ParentCo with or into the ParentCo or
the winding-up, liquidation or dissolution of any wholly-owned subsidiary of
ParentCo provided that all of the assets of such subsidiary are transferred to
ParentCo or another wholly-owned subsidiary of ParentCo and any such
transactions are expressly permitted by this Article 9.
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ARTICLE 10
AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
SECTION 10.1 AMENDMENTS, MODIFICATIONS, ETC.
Subject to Section 10.4 hereof, this Agreement may not be amended,
modified or waived except by an agreement in writing executed by the Company,
the Holders, CallCo, ParentCo and the Trustee. No amendment to or modification
or waiver of any of the provisions of this Agreement otherwise permitted
hereunder shall be effective unless made in writing and signed by all of the
parties hereto.
SECTION 10.2 MINISTERIAL AMENDMENTS.
(1) Notwithstanding the provisions of Section 10.1 hereof, the parties to
this Agreement, other than the Holders may, by written notice to the
Holders, at any time and from time to time, without the approval of the
Holders, amend or modify this Agreement for the purposes of:
(a) adding to the covenants of any or all of the parties hereto
for the protection of the Holders hereunder;
(b) making such amendments or modifications not inconsistent with
this Agreement as may be necessary or desirable with respect
to matters or questions which, in the opinion of the board of
directors of each of ParentCo, CallCo and the Company and in
the opinion of the Trustee and its counsel, having in mind the
best interests of the Holders as a whole, it may be expedient
to make, provided that such amendments and modifications will
not be prejudicial to the interests of the Holders; or
(c) making such changes or corrections which, on the advice of
counsel to the Company, CallCo, ParentCo and the Trustee, are
required for the purpose of curing or correcting any ambiguity
or defect or inconsistent provision or clerical omission or
mistake or manifest error; provided that the Trustee and its
counsel changes or corrections will not be prejudicial to the
interests of the Holders.
SECTION 10.3 MEETING TO CONSIDER AMENDMENTS.
The Company, at the request of ParentCo or CallCo shall call a meeting
or meetings of the Holders for the purpose of considering any proposed amendment
or modification requiring approval pursuant hereto. Any such meeting or meetings
shall be called and held in accordance with the constating documents of the
Company, the Exchangeable Share Provisions and all applicable laws.
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SECTION 10.4 CHANGES IN CAPITAL OF PARENTCO AND THE COMPANY.
At all times after the occurrence of any event effected pursuant to
Section 2.6 or Section 2.7 of the Support Agreement, as a result of which either
ParentCo Common Stock or the Exchangeable Shares or both are in any way changed,
this Agreement shall forthwith be amended and modified as necessary in order
that it shall apply with full force and effect, mutatis mutandis, to all new
securities into which ParentCo Common Stock or the Exchangeable Shares or both
are so changed, and the parties hereto shall execute and deliver a supplemental
agreement giving effect to and evidencing such necessary amendments and
modifications.
SECTION 10.5 EXECUTION OF SUPPLEMENTAL AGREEMENTS.
(1) From time to time the Company (when authorized by a resolution of its
Board of Directors), ParentCo (when authorized by a resolution of its
board of directors), CallCo (when authorized by a resolution of its
board of directors) the Holders and the Trustee may, subject to the
provisions of these presents, and they shall, when so directed by these
presents, execute and deliver by their proper officers, agreements or
other instruments supplemental hereto, which thereafter shall form part
hereof, for any one or more of the following purposes:
(a) evidencing the succession of any ParentCo Successors to
ParentCo and the covenants of and obligations assumed by each
such ParentCo Successor in accordance with the provisions of
Article 9 hereof and the successor of any successor trustee in
accordance with the provisions of Article 8 hereof;
(b) making any additions to, deletions from or alterations of the
provisions of this agreement or the Insolvency Exchange Right
or the Automatic Exchange Rights which, in the opinion of the
Trustee and its counsel, will not be prejudicial to the
interests of the Holders as a whole or are in the opinion of
counsel to the Trustee necessary or advisable in order to
incorporate, reflect or comply with any legislation the
provisions of which apply to ParentCo, CallCo, the Company,
the Trustee or this Agreement; and
(c) for any other purposes not inconsistent with the provisions of
this Agreement, including without limitation to make or
evidence any amendment or modification to this Agreement as
contemplated hereby, provided that, in the opinion of the
Trustee and its counsel, the rights of the Trustee and the
Holders will not be prejudiced thereby.
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ARTICLE 11
TERMINATION
SECTION 11.1 TERM.
(1) The Trust created by this Agreement shall continue until the earliest
to occur of the following events:
(a) no outstanding Exchangeable Shares are held by a Holder;
(b) each of the Company, the Holders and ParentCo, CallCo elects
in writing to terminate the Trust; and
(c) 21 years after the death of the last survivor of the
descendants of His Majesty King Xxxxxx VI of the United
Kingdom of Great Britain and Northern Ireland living on the
date of the creation of the Trust.
SECTION 11.2 SURVIVAL OF AGREEMENT.
This Agreement shall survive any termination of the Trust and shall
continue until there are no Exchangeable Shares outstanding held by a Holder;
provided, however, that the provisions of Articles 6 and 7 hereof shall survive
any such termination of this Agreement.
ARTICLE 12
GENERAL
SECTION 12.1 SEVERABILITY.
If any provision of this Agreement is held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remainder of this
Agreement shall not in any way be affected or impaired thereby, and this
Agreement shall be carried out as nearly as possible in accordance with its
original terms and conditions.
SECTION 12.2 ENUREMENT.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, executioners, administrators,
successors and permitted assigns.
SECTION 12.3 NOTICES TO PARTIES.
(1) All notices and other communications between the parties hereunder
shall be in writing and shall be deemed to have been given if delivered
personally or by confirmed telecopy to the parties at the following
addresses (or at such other address for such party as shall be
specified in like notice):
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TO PARENTCO: Xxxxxx Technologies, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Fax: (000) 000-0000
With a copy to: Xxxxxx, Xxxxxxx & Xxxxxx L.L.P.
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
TO THE COMPANY: Xxxxxx Canada Corporation
000 Xxxxx Xxxxx Xxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Fax: (000) 000-0000
With a copy to: Xxxxxx, Xxxxxxx & Xxxxxx
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
With an additional copy to: Stikeman, Xxxxxxx
Xxxxx 0000
Xxxxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx, X0X 0X0
Attention: Xxxxxxxx Xxxxxxx, Esq.
Fax: (000) 000-0000
-31-
35
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TO CALLCO: Xxxxxx CallCo Corporation
000 Xxxxx Xxxxx Xxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Fax: (000) 000-0000
With a Copy to: Xxxxxx, Xxxxxxx & Xxxxxx L.L.P.
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
With an additional copy to: Stikeman, Xxxxxxx
Xxxxx 0000
Xxxxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx, X0X 0X0
Attention: Xxxxxxxx Xxxxxxx, Esq.
Fax: (000) 000-0000
TO THE TRUSTEE: Montreal Trust Company of Canada
000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx, X0X 0X0
Attention: Manager Client Services
Fax: (000) 000-0000
(2) Any notice or other communication given personally shall be deemed to
have been given and received upon delivery thereof, and if given by
telecopy shall be deemed to have been given and received on the date of
receipt thereof unless such day is not a Business Day in which case it
shall be deemed to have been given and received upon the immediately
following Business Day.
SECTION 12.4 NOTICE TO HOLDERS.
Any and all notices to be given and any documents to be sent to any
Holders may be given or sent to the address of such Holder shown on the register
of Holders of Exchangeable Shares in any manner permitted by the Exchangeable
Share Provisions and shall be deemed to be received (if given or sent in such
manner) at the time specified in such Exchangeable Share Provisions, the
provisions of which
36
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Exchangeable Share Provisions shall apply mutatis mutandis to notices or
documents as aforesaid sent to such Holders.
SECTION 12.5 RISK OF PAYMENTS BY POST.
Whenever payments are to be made or documents are to be sent to any
Holder by the Trustee, by the Company, by CallCo or by ParentCo or by such
Holder to the Trustee or to ParentCo, or to CallCo or the Company, the making of
such payment or sending of such document sent through the post shall be at the
risk of the Company or CallCo or ParentCo, in the case of payments made or
documents sent by the Trustee or the Company or CallCo or ParentCo, and the
Holder, in the case of payments made or documents sent by the Holder.
SECTION 12.6 COUNTERPARTS.
This agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same instrument.
SECTION 12.7 JURISDICTION.
This agreement shall be construed and enforced in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein.
SECTION 12.8 ATTAINMENT.
ParentCo and CallCo agree that any action or proceeding arising out of
or relating to this Agreement may be instituted in the courts of Ontario, waives
any objection which it may have now or hereafter to the venue of any such action
or proceeding, irrevocably submits to the jurisdiction of such courts in any
such action or proceeding, agrees to be bound by any judgement of such courts
and agrees not to seek, and hereby waives, any review of the merits of any such
judgement by the courts of any other jurisdiction and hereby appoints Stikeman,
Xxxxxxx at its registered office in the Province of Ontario as ParentCo's and
CallCo's attorney for service of process.
IN WITNESS WHEREOF, the parties hereby have caused this agreement to be
duly executed as of the date first above written.
XXXXXX TECHNOLOGIES, INC.
By:
---------------------------------
Authorized Signing Officer
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XXXXXX CANADA CORPORATION.
By:
---------------------------------
Authorized Signing Officer
XXXXXX CALLCO CORPORATION.
By:
------------------------------------
Authorized Signing Officer
MONTREAL TRUST COMPAMY OF CANADA
By:
------------------------------------
Authorized Signing Officer
By:
------------------------------------
Authorized Signing Officer
HOLDERS:
----------------------------------------
Xxxxxxxx Xxxxx
----------------------------------------
Xxxx Xxxxx
----------------------------------------
Xxxxxxxx Xxxxxxx
----------------------------------------
Xxxxxxx Xxxxx
----------------------------------------
Xxxx Xxx
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----------------------------------------
Xxxxxxx Xxxxxx
----------------------------------------
Xxxxxxx Xxxxx
----------------------------------------
Nahla Rashad
----------------------------------------
Xxxxxx Xxxxxx
1303949 ONTARIO INC.
By:
------------------------------------
Name:
Title:
THE VENGROWTH INVESTMENT
FUND INC.
By:
------------------------------------
Name:
Title:
